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What Is a Corporate Raider?

In business, a corporate raider is a term used for investors who are participate in a directed or orchestrated hostile takeover of a business. Also known as a company breaker, the corporate raider will chase a corporation with the goal of selling its many assets in order to maximize big profits.

In order to become an effective corporate raider, the investor must be a person who has a strong financial background and a tight strategy to implement in getting a targeted corporation and then dividing it up so that they can gain the biggest possible profit while also paying off the investment that he has exposed to the deal. A corporate raider must also have an acute sense to identify which corporations are vulnerable to an attack so that he can gain gradual control but still strong enough that it still remains an attractive looking target for a takeover. Usually, a company that is ripe for a takeover are those that have an equal amount of assets both liquid or disposable, but is currently in a vulnerable position that the price of their stocks has dropped enough to that buying huge chunks of stock is easy. This is important because a lot rests on the corporate raider being able to buy enough stocks to wrest control of the company.

The moment the corporate raider gains a controlling interest in his target corporation, the task of convincing the board and the stock holders to agree with his plan of breaking up the company or buy out the remaining stockholders. When this happens, the corporate raider will now have free rein to dismantle the corporation and earn money from the sales.

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